American River Bancshares (AMRB) 10-Q 9 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 09, 2018
Document and Entity Information:
Entity Registrant Name	AMERICAN RIVER BANKSHARES
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Entity Central Index Key	1,108,236
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		5,864,802
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEET (Una

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
ASSETS
Cash and due from banks	$ 45,068	$ 38,467
Federal funds sold	8,000	0
Total cash and cash equivalents	53,068	38,467
Interest-bearing deposits in banks	1,746	1,746
Investment securities:
Available-for-sale, at fair value	281,660	262,322
Held-to-maturity, at amortized cost	330	378
Loans and leases, less allowance for loan and lease losses of $4,492 at June 30, 2018 and $4,478 at December 31, 2017	290,552	308,713
Premises and equipment, net	1,084	1,158
Federal Home Loan Bank stock	3,932	3,932
Goodwill and other intangible assets	16,321	16,321
Other real estate owned	961	961
Bank owned life insurance	15,273	15,122
Accrued interest receivable and other assets	10,329	6,502
Total Assets	675,256	655,622
Deposits:
Noninterest bearing	221,402	215,528
Interest-bearing	359,914	340,552
Total deposits	581,316	556,080
Short-term borrowings	6,500	3,500
Long-term borrowings	9,000	12,000
Accrued interest payable and other liabilities	6,547	7,121
Total liabilities	603,363	578,701
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; none outstanding	0	0
Common stock, no par value; 20,000,000 shares authorized; issued and outstanding – 5,864,802 shares at June 30,	30,082	34,463
Retained earnings	44,801	42,779
Accumulated other comprehensive income, net of taxes	(2,990)	(321)
Total shareholders' equity	71,893	76,921
Total liabilities and shareholders' euity	$ 675,256	$ 655,622

CONSOLIDATED BALANCE SHEET (Un3

CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for loan and lease losses (in dollars)	$ 4,492	$ 4,478
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	5,864,802	6,132,362
Common stock, shares outstanding	5,864,802	6,132,362

CONSOLIDATED STATEMENT OF INCOM

CONSOLIDATED STATEMENT OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Interest and fees on loans:
Taxable	$ 3,483	$ 3,458	$ 6,811	$ 6,888
Exempt from Federal income taxes	128	133	256	266
Interest on Federal funds sold	98	0	148	0
Interest on deposits in banks	7	3	13	5
Interest and dividends on investment securities:
Taxable	1,637	1,363	3,028	2,686
Exempt from Federal income taxes	145	159	308	316
Dividends	0	5	0	13
Total interest income	5,498	5,121	10,564	10,174
Interest expense:
Interest on deposits	324	203	599	397
Interest on borrowings	54	49	108	97
Total interest expense	378	252	707	494
Net interest income	5,120	4,869	9,857	9,680
Provision for loan and lease losses	0	0	0	0
Net interest income after provision for loan and lease losses	5,120	4,869	9,857	9,680
Noninterest income:
Service charges on deposit accounts	116	114	233	231
Gain on sale of securities	10	86	11	142
Other noninterest income	254	239	508	485
Total noninterest income	380	439	752	858
Noninterest expense:
Salaries and employee benefits	2,517	2,064	4,723	4,234
Occupancy	262	262	524	531
Furniture and equipment	136	147	274	298
Federal Deposit Insurance Corporation assessments	53	52	106	105
Expenses related to other real estate owned	(3)	12	2	32
Other expense	863	831	1,549	1,598
Total noninterest expense	3,828	3,368	7,178	6,798
Income before provision for income taxes	1,672	1,940	3,431	3,740
Provision for income taxes	403	643	809	1,259
Net income	$ 1,269	$ 1,297	$ 2,622	$ 2,481
Basic earnings per share	$ 0.22	$ 0.20	$ 0.44	$ 0.38
Diluted earnings per share	0.22	0.20	0.44	0.38
Cash dividends per share	$ 0.05	$ 0.05	$ 0.10	$ 0.10

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 1,269	$ 1,297	$ 2,622	$ 2,481
Other comprehensive (loss) income:
(Decrease) increase in net unrealized gains on investment securities	(1,150)	412	(3,862)	873
Deferred tax benefit (expense)	367	(166)	1,200	(344)
Increase in net unrealized (losses) gains on investment securities, net of tax	(783)	246	(2,662)	529
Reclassification adjustment for realized gains included in net income	(10)	(86)	(11)	(142)
Tax effect	3	35	4	57
Realized gains, net of tax	(7)	(51)	(7)	(85)
Total other comprehensive (loss) gain income	(790)	195	(2,669)	444
Comprehensive income (loss)	$ 479	$ 1,492	$ (47)	$ 2,925

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Begining Balance, Amount at Dec. 31, 2016	$ 42,484	$ 40,822	$ 544	$ 83,850
Begining Balance, Shares at Dec. 31, 2016	6,661,726
Net income		2,481		2,481
Other comprehensive income, net of tax			444	444
Cash dividends ($0.10 per share)		(657)		(657)
Net restricted stock award activity and related compensation expense, Amount	$ 181			181
Net restricted stock award activity and related compensation expense, Shares	22,032
Stock options exercised, Amount	$ 60			60
Stock options exercised, Shares	7,095
Stock option compensation expense, Amount	$ 20			20
Stock option compensation expense, Shares	0
Retirement of common stock, Amount	$ (5,006)			(5,006)
Retirement of common stock, Shares	(333,086)
Ending Balance, Amount at Jun. 30, 2017	$ 37,739	42,646	988	81,373
Ending Balance, Shares at Jun. 30, 2017	6,357,767
Begining Balance, Amount at Dec. 31, 2017	$ 34,463	42,779	(321)	76,921
Begining Balance, Shares at Dec. 31, 2017	6,132,362
Net income		2,622		2,622
Other comprehensive income, net of tax			(2,669)	(2,669)
Cash dividends ($0.10 per share)		(601)		(601)
Net restricted stock award activity and related compensation expense, Amount	$ 136	1		137
Net restricted stock award activity and related compensation expense, Shares	17,859
Stock options exercised, Amount	$ 123			123
Stock options exercised, Shares	13,359
Stock option compensation expense, Amount	$ 14			14
Stock option compensation expense, Shares	0
Retirement of common stock, Amount	$ (4,654)			(4,654)
Retirement of common stock, Shares	(298,778)
Ending Balance, Amount at Jun. 30, 2018	$ 30,082	$ 44,801	$ (2,990)	$ 71,893
Ending Balance, Shares at Jun. 30, 2018	5,864,802

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 2,622	$ 2,481
Adjustments to reconcile net income to net cash provided by operating activities:
Increase in deferred loan origination fees, net	93	3
Depreciation and amortization	138	173
Gain on sale, call, and impairment of investment securities, net	(11)	(142)
Amortization of investment security premiums and discounts, net	1,491	1,648
Increase in cash surrender values of life insurance policies	(151)	(157)
Stock based compensation expense	151	201
Increase in accrued interest receivable and other assets	(2,604)	(98)
Decrease in accrued interest payable and other liabilities	(574)	(442)
Net cash provided by operating activities	1,155	3,667
Cash flows from investing activities:
Proceeds from the sale of available-for-sale investment securities	14,443	17,605
Proceeds from matured available-for-sale investment securities	0	1,930
Proceeds from called available-for-sale investment securities	1,499	145
Purchases of available-for-sale investment securities	(61,756)	(45,419)
Proceeds from principal repayments for available-for-sale investment securities	21,105	21,513
Proceeds from principal repayments for held-to-maturity investment securities	48	54
Net increase in interest-bearing deposits in banks	0	(249)
Net decrease in loans	18,067	7,937
Net increase in FHLB stock	0	(153)
Purchases of equipment	(64)	(86)
Net cash (used in) provided by investing activities	(6,658)	3,277
Cash flows from financing activities:
Net increase (decrease) in demand, interest-bearing and savings deposits	27,717	(4,771)
Net decrease in time deposits	(2,481)	(2,155)
Net increase (decrease) in short-term borrowings	3,000	(1,500)
Net (decrease) increase in long-term borrowings	(3,000)	1,500
Proceeds from stock option exercise	123	60
Cash dividends paid	(601)	(657)
Cash paid to repurchase common stock	(4,654)	(5,006)
Net cash used in financing activities	20,104	(12,529)
Increase (decrease) in cash and cash equivalents	14,601	(5,585)
Cash and cash equivalents at beginning of year	38,467	27,589
Cash and cash equivalents at end of period	$ 53,068	$ 22,004

1. CONSOLIDATED FINANCIAL STATE

1. CONSOLIDATED FINANCIAL STATEMENTS	6 Months Ended
	Jun. 30, 2018
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS	In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position of American River Bankshares (the “Company”) at June 30, 2018 and December 31, 2017, the results of its operations and statement of comprehensive income for the three-month and six-month periods ended June 30, 2018 and 2017, its cash flows for the six-month periods ended June 30, 2018 and 2017 and its statement of changes in shareholders’ equity for the six months ended June 30, 2018 and 2017 in conformity with accounting principles generally accepted in the United States of America. Certain disclosures normally presented in the notes to the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The Company believes that the disclosures are adequate to make the information not misleading. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017. The results of operations for the three-month and six-month periods ended June 30, 2018 may not necessarily be indicative of the operating results for the full year. In preparing such financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates. Management has determined that since all of the banking products and services offered by the Company are available in each branch office of American River Bank, all branch offices are located within the same economic environment and management does not allocate resources based on the performance of different lending or transaction activities, it is appropriate to aggregate all of the branch offices and report them as a single operating segment. No client accounts for more than ten percent (10%) of revenues for the Company or American River Bank. Adoption of New Accounting Standard: On January 1, 2018, the Company adopted ASU 2014-09 “ Revenue from Contracts with Customers Revenue from Contracts with Customers

2. STOCK-BASED COMPENSATION

2. STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2018
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	Equity Plans On March 17, 2010, the Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the Company’s shareholders on May 20, 2010. In 2000, the Board of Directors adopted and the Company’s shareholders approved a stock option plan (the “2000 Plan”), under which 18,041 options remain outstanding at June 30, 2018. At June 30, 2018, under the 2010 Plan, there were 31,008 stock options and 41,457 restricted shares outstanding and the total number of authorized shares that remain available for issuance was 1,290,590. The 2010 Plan provides for the following types of stock-based awards: incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted performance stock, unrestricted Company stock, and performance units. Awards under the 2000 Plan were either incentive stock options or nonqualified stock options. Under the 2010 Plan, the awards may be granted to employees and directors under incentive and nonqualified option agreements, restricted stock agreements, and other awards agreements. The unvested restricted stock under the 2010 Plan have dividend and voting rights. The 2010 Plan and the 2000 Plan (collectively the “Plans”) require that the option price may not be less than the fair market value of the stock at the date the option is awarded. The option awards under the Plans expire on dates determined by the Board of Directors, but not later than ten years from the date of award. The vesting period is generally five years; however, the vesting period can be modified at the discretion of the Company’s Board of Directors. Outstanding option awards under the Plans are exercisable until their expiration, however, no new options may be awarded under the 2000 Plan. New shares are issued upon exercise of an option. The award date fair value of awards is determined by the market price of the Company’s common stock on the date of award and is recognized ratably as compensation expense or director expense over the vesting periods. The shares of common stock awarded pursuant to such agreements vest in increments over one to five years from the date of award. The shares awarded to employees and directors under the restricted stock agreements vest on the applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated. Equity Compensation For the three-month periods ended June 30, 2018 and 2017, the compensation cost recognized for equity compensation was $78,000 and $100,000, respectively. The recognized tax benefit for equity compensation expense was $19,000 and $36,000, respectively, for the three-month periods ended June 30, 2018 and 2017. For the six-month periods ended June 30, 2018 and 2017, the compensation cost recognized for equity compensation was $151,000 and $201,000, respectively. The recognized tax benefit for equity compensation expense was $37,000 and $73,000, respectively, for the six-month periods ended June 30, 2018 and 2017. At June 30, 2018, the total unrecognized pre-tax compensation cost related to nonvested stock option awards was $36,000. This amount will be recognized over the next 2.0 years and the weighted average period of recognizing these costs is expected to be 1.2 years. At June 30, 2018, the total unrecognized pre-tax compensation cost related to restricted stock awards was $458,000. This amount will be recognized over the next 3.9 years and the weighted average period of recognizing these costs is expected to be 1.2 years. Equity Plans Activity Stock Options There were no stock options awarded during the three-month and six-month periods ended June 30, 2018 and June 30, 2017. A summary of option activity under the Plans as of June 30, 2018 and changes during the period then ended is presented below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding at January 1, 2018 97,543 $ 11.26 3.1 years $ 419 Awarded — — — — Exercised (13,359 ) 9.23 — — Expired, forfeited or cancelled (35,135 ) 15.67 — — Outstanding at June 30, 2018 49,049 $ 8.65 3.9 years $ 353 Vested at June 30, 2018 41,913 $ 8.54 3.5 years $ 306 Non-vested at June 30, 2018 7,136 $ 9.29 6.5 years $ 47 Restricted Stock There were 10,915 and 22,514 shares of restricted stock awarded during the three-month and six-month periods ended June 30, 2018, respectively. There were 9,949 and 24,982 shares of restricted stock awarded during the three-month and six-month periods ended June 30, 2017, respectively. A summary of restricted stock award activity under the 2010 Plan as of June 30, 2018 and changes during the period then ended is presented below: Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2018 49,053 $ 12.27 Awarded 22,514 15.44 Less: Vested (25,455 ) 10.84 Less: Expired, forfeited or cancelled (4,655 ) 13.69 Nonvested at June 30, 2018 41,457 $ 10.61 Other Equity Awards There were no stock appreciation rights, restricted performance stock, unrestricted Company stock, or performance units awarded during the three-month or six-month month periods ended June 30, 2018 or 2017 or outstanding at June 30, 2018 or December 31, 2017. The intrinsic value used for stock options and restricted stock awards was derived from the market price of the Company’s common stock of $15.85 as of June 30, 2018.

3. COMMITMENTS AND CONTINGENCIE

3. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2018
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	In the normal course of business there are outstanding various commitments to extend credit which are not reflected in the financial statements, including loan commitments of approximately $21,966,000 and standby letters of credit of approximately $121,000 at June 30, 2018 and loan commitments of approximately $10,923,000 and standby letters of credit of approximately $121,000 at December 31, 2017. Such commitments relate primarily to real estate construction loans, revolving lines of credit and other commercial loans. However, all such commitments will not necessarily culminate in actual extensions of credit by the Company during 2018 as some of these are expected to expire without being fully drawn upon. Standby letters of credit are commitments issued to guarantee the performance or financial obligation of a client to a third party. These guarantees are issued primarily relating to purchases of inventory, insurance programs, performance obligations to government agencies, or as security for real estate rents by commercial clients and are typically short-term in nature. Credit risk is similar to that involved in extending loan commitments to clients and accordingly, evaluation and collateral requirements similar to those for loan commitments are used. The majority of all such commitments are collateralized. The fair value of the liability related to these standby letters of credit, which represents the fees received for issuing the guarantees, was not significant at June 30, 2018 or December 31, 2017.

4. EARNINGS PER SHARE COMPUTATI

4. EARNINGS PER SHARE COMPUTATION	6 Months Ended
	Jun. 30, 2018
EARNINGS PER SHARE COMPUTATION
EARNINGS PER SHARE COMPUTATION	Basic earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period (5,843,340 and 5,919,321 shares for the three-month and six-month periods ended June 30, 2018 and 6,346,650 and 6,454,864 shares for the three-month and six-month periods ended June 30, 2017). Using the treasury stock method, diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock, result in the issuance of common stock. Diluted earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period plus the dilutive effect of stock based awards. There were 39,574 and 38,082, respectively, dilutive shares for the three-month and six-month periods ended June 30, 2018 and 81,372 and 85,801, respectively, dilutive shares for the three-month and six-month periods ended June 30, 2017. For the three-month periods ended June 30, 2018 and 2017, there were zero and 32,448 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. For the six-month periods ended June 30, 2018 and 2017, there were zero and 32,448 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. Earnings per share is retroactively adjusted for stock dividends and stock splits, if applicable, for all periods presented.

5. INVESTMENT SECURITIES

5. INVESTMENT SECURITIES	6 Months Ended
	Jun. 30, 2018
INVESTMENTS SECURITIES (Tables)
INVESTMENT SECURITIES	The amortized cost and estimated fair values of Available-for-Sale and Held-to-Maturity investment securities at June 30, 2018 and December 31, 2017 consisted of the following (dollars in thousands): Available-for-Sale June 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 260,715 $ 634 $ (4,890 ) $ 256,459 Obligations of states and political subdivisions 15,851 153 (294 ) 15,710 Corporate bonds 6,492 84 (70 ) 6,506 U.S. Treasury securities 2,989 — (4 ) 2,985 $ 286,047 $ 871 $ (5,258 ) $ 281,660 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 233,956 $ 1,184 $ (2,271 ) $ 232,869 Obligations of states and political subdivisions 22,281 528 (94 ) 22,715 Corporate bonds 6,490 160 (24 ) 6,626 Equity securities: Corporate stock 51 61 — 112 $ 262,778 $ 1,933 $ (2,389 ) $ 262,322 Net unrealized losses on available-for-sale investment securities totaling $4,387,000 were recorded, net of $1,397,000 in tax liabilities, as accumulated other comprehensive loss within shareholders’ equity at June 30, 2018. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month and six-month periods ended June 30, 2018 totaled $15,942,000 and $11,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and six-month periods ended June 30, 2018. Net unrealized losses on available-for-sale investment securities totaling $456,000 were recorded, net of $135,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2017. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month period ended June 30, 2017 totaled $9,133,000 and $86,000, respectively, and for the six-month period ended June 30, 2017 proceeds and gross realized gains from the sale and call of available-for-sale investment securities totaled $17,750,000 and $142,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and six-month periods ended June 30, 2017. Held-to-Maturity June 30, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 330 $ 19 $ — $ 349 December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 378 $ 26 $ — $ 404 There were no sales or transfers of held-to-maturity investment securities for the periods ended June 30, 2018 and June 30, 2017. Investment securities with unrealized losses at June 30, 2018 and December 31, 2017 are summarized and classified according to the duration of the loss period as follows (dollars in thousands): June 30, 2018 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Entities $ 146,460 $ (2,727 ) 59,701 (2,163 ) $ 206,161 $ (4,890 ) Obligations of states and political subdivisions 1,686 (89 ) 4,483 (205 ) 6,169 (294 ) Corporate bonds 2,422 (70 ) — — 2,422 (70 ) U.S. Treasury securities 2,985 (4 ) — — 2,985 (4 ) $ 153,553 $ (2,890 ) $ 64,184 $ (2,368 ) $ 217,737 $ (5,258 ) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: US Government Agencies and Sponsored Entities $ 119,455 $ (1,148 ) $ 49,258 $ (1,123 ) $ 168,713 $ (2,271 ) Obligations of states and political subdivisions 1,130 (9 ) 4,654 (85 ) 5,784 (94 ) Corporate bonds 1,967 (24 ) — — 1,967 (24 ) $ 122,552 $ (1,181 ) $ 53,912 $ (1,208 ) $ 176,464 $ (2,389 ) There were no held-to-maturity investment securities with unrealized losses as of June 30, 2018 or December 31, 2017. At June 30, 2018, the Company held 218 securities of which 87 were in a loss position for less than twelve months and 43 were in a loss position for twelve months or more. Of the 87 securities in a loss position for less than twelve months, 80 were U.S. Government Agencies and Sponsored Entities securities, five were obligations of states or political subdivisions, and two were corporate bonds and of the 43 securities that were in a loss position for greater than twelve months, 39 were U.S. Government Agencies and Sponsored Entities securities and four was an obligation of states or political subdivisions. At December 31, 2017, the Company held 217 securities of which 64 were in a loss position for less than twelve months and 35 were in a loss position for twelve months or more. Of the 35 securities in a loss position for greater than twelve months at December 31, 2017, four were municipal securities and 31 were US Government Agencies and Sponsored Agencies securities. The unrealized loss on the Company’s investment securities is primarily driven by interest rates. Because the decline in market value is attributable to a change in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be until maturity, management does not consider these investments to be other-than-temporarily impaired. The amortized cost and estimated fair values of investment securities at June 30, 2018 by contractual maturity are shown below (dollars in thousands). Available-for-Sale Held-to-Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ 2,989 $ 2,985 After one year through five years 4,629 4,570 After five years through ten years 12,306 12,310 After ten years 5,408 5,336 25,332 25,201 Investment securities not due at a single maturity date: US Government Agencies and Sponsored Entities 260,715 256,459 $ 330 $ 349 $ 286,047 $ 281,660 $ 330 $ 349 Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

6. IMPAIRED AND NONPERFORMING L

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED	6 Months Ended
	Jun. 30, 2018
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED	At June 30, 2018 and December 31, 2017, the recorded investment in nonperforming loans and leases was approximately $1,944,000 and $1,892,000, respectively. Nonperforming loans and leases include all such loans and leases that are either placed on nonaccrual status or are 90 days past due as to principal or interest but still accrue interest because such loans are well-secured and in the process of collection. The Company considers a loan to be impaired when, based on current information and events, it is probable that it will be unable to collect all amounts due (principal and interest) according to the contractual terms of the original loan agreement. At June 30, 2018, the recorded investment in loans and leases that were considered to be impaired totaled $11,981,000, which includes $1,944,000 in nonaccrual loans and leases and $10,037,000 in performing loans and leases. Of the total impaired loans of $11,981,000, loans totaling $6,385,000 were deemed to require no specific reserve and loans totaling $5,596,000 were deemed to require a related valuation allowance of $446,000. At December 31, 2017, the recorded investment in loans and leases that were considered to be impaired totaled $13,757,000, which includes $1,892,000 in nonaccrual loans and leases and $11,865,000 in performing loans and leases. Of the total impaired loans of $13,757,000, loans totaling $7,601,000 were deemed to require no specific reserve and loans totaling $6,156,000 were deemed to require a related valuation allowance of $355,000. At June 30, 2018 and December 31, 2017, the recorded investment in other real estate owned (“OREO”) was $961,000. During the first and second quarters of 2018, the Company did not add any new, impair, or sell any of the OREO properties. The June 30, 2018 and December 31, 2017 OREO balance of $961,000 consisted of one commercial land property. Nonperforming assets at June 30, 2018 and December 31, 2017 are summarized as follows: (dollars in thousands) June 30, 2018 December 31, 2017 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 13 $ 1,603 Nonaccrual loans and leases that are past due 1,931 289 Loans and leases past due 90 days and accruing interest — — Other real estate owned 961 961 Total nonperforming assets $ 2,905 $ 2,853 Nonperforming loans and leases to total loans and leases 0.66 % 0.60 % Total nonperforming assets to total assets 0.43 % 0.44 % Impaired loans and leases as of and for the periods ended June 30, 2018 and December 31, 2017 are summarized as follows: (dollars in thousands) As of June 30, 2018 As of December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ 1,598 $ 2,671 $ — Real estate-commercial 5,990 6,223 — 5,674 5,907 — Real estate-residential 326 413 — 329 416 — Consumer 69 69 — — — — Subtotal $ 6,385 $ 6,705 $ — $ 7,601 $ 8,994 $ — With an allowance recorded: Commercial $ 1,562 $ 2,635 $ 200 $ — $ — $ — Real estate-commercial 2,771 2,854 171 4,396 4,483 261 Real estate-multi-family — — — 474 474 21 Real estate-residential 1,263 1,263 75 1,286 1,286 73 Subtotal $ 5,596 $ 6,752 $ 446 $ 6,156 $ 6,243 $ 355 Total: Commercial $ 1,562 $ 2,635 $ 200 $ 1,598 $ 2,671 $ — Real estate-commercial 8,761 9,077 171 10,070 10,390 261 Real estate-multi-family — — — 474 474 21 Real estate-residential 1,589 1,676 75 1,615 1,702 73 Consumer 69 69 — — — — $ 11,981 $ 13,457 $ 446 $ 13,757 $ 15,237 $ 355 The following table presents the average balance related to impaired loans and leases for the periods indicated (dollars in thousands): Average Recorded Investments for the three months ended Average Recorded Investments for the six months ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Commercial $ 1,562 $ 16 $ 1,580 $ — Real estate-commercial 8,794 14,067 8,828 13,732 Real estate-multi-family — 481 — 478 Real estate-residential 1,596 2,296 1,602 2,437 Agriculture — 357 — 351 Consumer 69 — 69 — Total $ 12,021 $ 17,217 $ 12,079 $ 16,998 The following table presents the interest income recognized on impaired loans and leases for the periods indicated (dollars in thousands): Interest Income Recognized for the three months ended Interest Income Recognized for the six months ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Commercial $ — $ — $ — $ 1 Real estate-commercial 129 179 238 356 Real estate-multi-family — 8 — 16 Real estate-residential 21 37 41 63 Agriculture — 4 — 9 Consumer — — 2 — Total $ 150 $ 228 $ 281 $ 445

7. TROUBLED DEBT RESTRUCTURINGS

7. TROUBLED DEBT RESTRUCTURINGS	6 Months Ended
	Jun. 30, 2018
TROUBLED DEBT RESTRUCTURINGS
TROUBLED DEBT RESTRUCTURINGS	During the three and six-month periods ended June 30, 2018 and 2017, there were no loans that were modified as troubled debt restructurings. There were no payment defaults on troubled debt restructurings within 12 months following the modification for the three-month and six-month periods ended June 30, 2018, with the exception of one commercial loan with a June 30, 2018 balance of $1,562,000. There were no payment defaults on troubled debt restructurings within 12 months following the modification for the three-month and six-month periods ended June 30, 2017. At June 30, 2018 and December 31, 2017, there were no unfunded commitments on those loans considered troubled debt restructures.

8. ALLOWANCE FOR LOAN AND LEASE

8. ALLOWANCE FOR LOAN AND LEASE LOSSES	6 Months Ended
	Jun. 30, 2018
Schedule of Troubled Debt Restructurings on Financing Receivables (Tables)
ALLOWANCE FOR LOAN AND LEASE LOSSES	The Company’s loan and lease portfolio allocated by management’s internal risk ratings as of June 30, 2018 and December 31, 2017 are summarized below: June 30, 2018 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 23,308 $ 160,143 $ 62,197 $ 6,408 $ 14,976 Watch 125 15,854 3,871 — 1,848 Special mention — 1,265 — — — Substandard 31 282 — — — Doubtful or loss 1,562 — — — — Total $ 25,026 $ 177,544 $ 66,068 $ 6,408 $ 16,824 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 117 $ 2,603 $ 529 $ 270,281 Watch — — 150 21,848 Special mention — — 1 1,266 Substandard — — 69 382 Doubtful or loss — — — 1,562 Total $ 117 $ 2,603 $ 749 $ 295,339 December 31, 2017 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 23,617 $ 164,815 $ 73,644 $ 5,863 $ 13,767 Watch 96 18,083 4,381 — 1,507 Special mention 66 2,265 — — 539 Substandard — 289 — — — Doubtful or loss 1,598 — — — — Total $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 205 $ 1,713 $ 713 $ 284,337 Watch — — 155 24,222 Special mention — — 70 2,940 Substandard — — 7 296 Doubtful or loss — — — 1,598 Total $ 205 $ 1,713 $ 945 $ 313,393 The allocation of the Company’s allowance for loan and lease losses and by portfolio segment and by impairment methodology are summarized below: June 30, 2018 (dollars in thousands) Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2018 $ 447 $ 2,174 $ 1,047 $ 269 $ 205 $ — $ 31 $ 14 $ 291 $ 4,478 Provision for loan losses 213 (78 ) (208 ) 29 34 (1 ) 18 (3 ) (4 ) — Loans charged-off — — — — — — — — — — Recoveries 9 4 — — — 1 — — — 14 Ending balance, June 30, 2018 $ 669 $ 2,100 $ 839 $ 298 $ 239 $ — $ 49 $ 11 $ 287 $ 4,492 Ending balance: Individually evaluated for impairment $ 200 $ 171 $ — $ — $ 75 $ — $ — $ — $ — $ 446 Ending balance: Collectively evaluated for impairment $ 469 $ 1,929 $ 839 $ 298 $ 164 $ — $ 49 $ 11 $ 287 $ 4,046 Loans Ending balance $ 25,026 $ 177,544 $ 66,068 $ 6,408 $ 16,824 $ 117 $ 2,603 $ 749 $ — $ 295,339 Ending balance: Individually evaluated for impairment $ 1,562 $ 8,761 $ — $ — $ 1,589 $ — $ — $ 69 $ — $ 11,981 Ending balance: Collectively evaluated for impairment $ 23,464 $ 168,783 $ 66,068 $ 6,408 $ 15,235 $ 117 $ 2,603 $ 680 $ — $ 283,358 Allowance for Loan and Lease Losses Beginning balance, March 31, 2018 $ 546 $ 2,143 $ 966 $ 288 $ 218 $ — $ 31 $ 15 $ 281 $ 4,488 Provision for loan losses 121 (45 ) (127 ) 10 21 — 18 (4 ) 6 — Loans charged off — — — — — — — — — — Recoveries 2 2 — — — — — — — 4 Ending balance, June 30, 2018 $ 669 $ 2,100 $ 839 $ 298 $ 239 $ — $ 49 $ 11 $ 287 $ 4,492 December 31, 2017 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ — $ 261 $ 21 $ — $ 73 $ — $ — $ — $ — $ 355 Ending balance: Collectively evaluated for impairment $ 447 $ 1,913 $ 1,026 $ 269 $ 132 $ — $ 31 $ 14 $ 291 $ 4,123 Loans Ending balance $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ — $ 313,393 Ending balance: Individually evaluated for impairment $ 1,598 $ 10,070 $ 474 $ — $ 1,615 $ — $ — $ — $ — $ 13,757 Ending balance: Collectively evaluated for impairment $ 23,779 $ 175,382 $ 77,551 $ 5,863 $ 14,198 $ 205 $ 1,713 $ 945 $ — $ 299,636 June 30, 2017 (dollars in thousands) Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2017 $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Provision for loan losses 58 (12 ) (62 ) 11 15 — (5 ) (8 ) 3 — Loans charged-off — — — — — — — — — — Recoveries 3 53 — — — — — 3 — 59 Ending balance, June 30, 2017 $ 916 $ 2,091 $ 789 $ 457 $ 268 $ 1 $ 59 $ 19 $ 281 $ 4,881 Allowance for Loan and Lease Losses Beginning balance, March 31, 2017 $ 836 $ 2,107 $ 836 $ 479 $ 232 $ 1 $ 62 $ 21 $ 259 $ 4,833 Provision for loan losses 78 (60 ) (47 ) (22 ) 36 — (3 ) (4 ) 22 — Loans charged off — — — — — — — — — — Recoveries 2 44 — — — — — 2 — 48 Ending balance, June 30, 2017 $ 916 $ 2,091 $ 789 $ 457 $ 268 $ 1 $ 59 $ 19 $ 281 $ 4,881 The Company’s aging analysis of the loan and lease portfolio at June 30, 2018 and December 31, 2017 are summarized below: June 30, 2018 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ 18 $ 1,562 $ 1,580 $ 23,446 $ 25,026 — $ 1,593 Real estate: Commercial — — 283 283 177,261 177,544 — 283 Multi-family — — — — 66,068 66,068 — — Construction — — — — 6,408 6,408 — — Residential 99 — — 99 16,725 16,824 — — Other: Leases — — — — 117 117 — — Agriculture — — — — 2,603 2,603 — — Consumer — — 69 69 680 749 — 68 Total $ 99 $ 18 $ 1,914 $ 2,031 $ 293,308 $ 295,339 $ — $ 1,944 December 31, 2017 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 25,377 $ 25,377 $ — $ 1,597 Real estate: Commercial — — 289 289 185,163 185,452 — 289 Multi-family — — — — 78,025 78,025 — — Construction — — — — 5,863 5,863 — — Residential 146 — — 146 15,667 15,813 — — Other: Leases — — — — 205 205 — — Agriculture — — — — 1,713 1,713 — — Consumer 1 — — 1 944 945 — 6 Total $ 147 $ — $ 289 $ 436 $ 312,957 $ 313,393 $ — $ 1,892

9. BORROWING ARRANGEMENTS

9. BORROWING ARRANGEMENTS	6 Months Ended
	Jun. 30, 2018
Borrowing Arrangements
BORROWING ARRANGEMENTS	At June 30, 2018, the Company had $17,000,000 of unsecured short-term borrowing arrangements with two of its correspondent banks. There were no advances under the borrowing arrangements as of June 30, 2018 or December 31, 2017. The Company has a line of credit available with the Federal Home Loan Bank of San Francisco (the “FHLB”) which is secured by pledged mortgage loans and investment securities. Borrowings may include overnight advances as well as loans with terms of up to thirty years. Advances (both short-term and long-term) totaling $15,500,000 were outstanding from the FHLB at June 30, 2018, bearing interest rates ranging from 1.18% to 1.90% and maturing between July 20, 2018 and April 12, 2021. Advances totaling $15,500,000 were outstanding from the FHLB at December 31, 2017, bearing interest rates ranging from 1.18% to 1.90% and maturing between July 20, 2018 and April 12, 2021. Remaining amounts available under the borrowing arrangement with the FHLB at June 30, 2018 and December 31, 2017 totaled $108,277,000 and $117,546,000, respectively. In addition, the Company has a secured borrowing agreement with the Federal Reserve Bank of San Francisco. The borrowing can be secured by pledging selected loans and investment securities. Borrowings generally are short-term including overnight advances as well as loans with terms up to ninety days. Amounts available under this borrowing arrangement at June 30, 2018 and December 31, 2017 were $7,920,000 and $9,085,000, respectively. There were no advances outstanding under this borrowing arrangement as of June 30, 2018 and December 31, 2017.

10. INCOME TAXES

10. INCOME TAXES	6 Months Ended
	Jun. 30, 2018
INCOME TAXES
INCOME TAXES	The Company files its income taxes on a consolidated basis with its subsidiaries. The allocation of income tax expense (benefit) represents each entity’s proportionate share of the consolidated provision for (benefit from) income taxes. The Company accounts for income taxes using the balance sheet method, under which deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On the consolidated balance sheet, net deferred tax assets are included in accrued interest receivable and other assets. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above, if applicable, is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if applicable, as a component of interest expense in the consolidated statement of income. There have been no unrecognized tax benefits or accrued interest and penalties for the three-month and six-month periods ended June 30, 2018 and 2017.

11. FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2018
Assets and liabilities measured at fair value on a recurring and non-recurring basis are presented in the following table
FAIR VALUE MEASUREMENTS	The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of June 30, 2018 and December 31, 2017. They indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In 2018, the Company adopted the provisions of Accounting Standard Update 2016-01 “ Recognition and Measurement of Financial Assets and Financial Liabilities Estimated fair values are disclosed for financial instruments for which it is practicable to estimate fair value. These estimates are made at a specific point in time based on relevant market data and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The carrying amounts and estimated fair values of the Company’s financial instruments are as follows (dollars in thousands): Carrying Fair Value Measurements Using: June 30, 2018 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 45,068 $ 45,068 $ — $ — $ 45,068 Federal funds sold 8,000 8,000 — — 8,000 Interest-bearing deposits in banks 1,746 — 1,746 — 1,746 Available-for-sale securities 281,660 2,985 278,675 — 281,660 Held-to-maturity securities 330 — 349 — 349 FHLB stock 3,932 N/A N/A N/A N/A Net loans and leases: 290,552 — — 298,480 298,480 Accrued interest receivable 1,873 — 1,067 806 1,873 Financial liabilities: Deposits: Noninterest-bearing $ 221,402 $ 221,402 $ — $ — $ 221,402 Savings 70,184 70,184 — — 70,184 Money market 145,801 145,901 — — 145,901 Interest checking 66,729 66,729 — — 66,729 Time Deposits 77,200 — 77,038 — 77,038 Short-term borrowings 6,500 6,500 — — 6,500 Long-term borrowings 9,000 — 8,980 — 8,980 Accrued interest payable 65 7 58 — 65 Carrying Fair Value Measurements Using: December 31, 2017 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 38,467 $ 38,467 $ — $ — $ 38,467 Interest-bearing deposits in banks 1,746 — 1,750 — 1,750 Available-for-sale securities 262,322 66 262,256 — 262,322 Held-to-maturity securities 378 — 404 — 404 FHLB stock 3,932 N/A N/A N/A N/A Net loans and leases: 308,713 — — 317,900 317,900 Accrued interest receivable 1,956 — 1,124 832 1,956 Financial liabilities: Deposits: Noninterest-bearing $ 215,528 $ 215,528 $ — $ — $ 215,528 Savings 66,130 66,130 — — 66,130 Money market 130,032 130,032 — — 130,032 Interest checking 64,709 64,709 — — 64,709 Time Deposits 79,681 — 79,614 — 79,614 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12.000 — 11,978 — 11,978 Accrued interest payable 65 4 61 — 65 Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the fair values presented. The following methods and assumptions were used by the Company to estimate the fair values of its financial instruments at December 31, 2017: Cash and due from banks Interest-bearing deposits in banks Investment securities FHLB stock Loans and leases Deposits Short-term and long-term borrowings Accrued interest receivable and payable Off-balance sheet instruments Assets and liabilities measured at fair value on a recurring and non-recurring basis along with any related gain or loss recognized in the income statement due to fair value changes are presented in the following table: Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) June 30, 2018 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Entities $ 256,459 $ — $ 256,459 $ — $ — Obligations of states and political subdivisions 15,710 — 15,710 — — Corporate bonds 6,506 — 6,506 — — U.S. Treasury bonds 2,985 2,985 — — — Total recurring $ 281,660 $ 2,985 $ 278,675 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 1,362 $ — $ — $ 1,362 $ — Total nonrecurring $ 1,362 $ — $ — $ 1,362 $ — Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) December 31, 2017 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 232,869 $ — $ 232,869 $ — $ — Corporate Debt securities 6,626 — 6,626 Obligations of states and political subdivisions 22,715 — 22,715 — — Corporate stock 112 66 46 — — Total recurring $ 262,322 $ 66 $ 262,256 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 1,598 $ — $ — $ 1,598 $ (1,073 ) Real estate: Commercial 178 — — 178 — Residential 329 — — 329 — Other real estate owned Land 961 — — 961 — Total nonrecurring $ 3,066 $ — $ — $ 3,066 $ (1,073 ) There were no significant transfers between Levels 1 and 2 during the three-month and six-month periods ended June 30, 2018 or the twelve months ended December 31, 2017. The following methods were used to estimate the fair value of each class of financial instrument above: Available-for-sale securities – Impaired loans Other real estate owned

12. RECENTLY ISSUED ACCOUNTING

12. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2018
Recently Issued Accounting Pronouncements
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	In May 2014, the Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) jointly issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP and International Financial Reporting Standards (“IFRS”). Previous revenue recognition guidance in GAAP consisted of broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, IFRS provided limited revenue recognition guidance and, consequently, could be difficult to apply to complex transactions. Accordingly, the FASB and the IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would: (1) remove inconsistencies and weaknesses in revenue requirements; (2) provide a more robust framework for addressing revenue issues; (3) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; (4) provide more useful information to users of financial statements through improved disclosure requirements; and (5) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. To meet those objectives, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers. Revenue from Contracts with Customers - Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net), Identifying Performance Obligations and Licensing, Narrow-Scope Improvements and Practical Expedients, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. In January 2016, the FASB issued ASU No. 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02, “ Leases. . In June 2016, the FASB issued ASU No. 2016-13, “ Measurement of Credit Losses on Financial Instruments.

13. REVENUE FROM CONTRACTS WITH

13. REVENUE FROM CONTRACTS WITH CUSTOMERS	6 Months Ended
	Jun. 30, 2018
Revenue From Contracts With Customers
REVENUE FROM CONTRACTS WITH CUSTOMERS	On January 1, 2018 the Company adopted ASC Topic 606, as revised under ASU’s 2014-09, 2014-08 and 2016-20, using the modified retrospective method as of January 1, 2018. Other income disclosures for periods beginning after January 1, 2018 are presented under revised ASC Topic 606, which have not materially changed from the prior year amounts. Consistent with Topic 606, noninterest income covered by this guidance is recognized as services are transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Deposit Service Charges — Deposit service charges primarily consist of fees earned from our treasury management services. These services include bill pay, ACH, positive pay, lockbox, remote deposit capture, online banking and cash vault, among others. Customers are given the option to pay for these services in cash or by offsetting the fees for these services against an earnings credit that is given for maintaining noninterest-bearing deposits. The Company’s performance obligations on its treasury services are satisfied either at the time of the transaction or over the course of a month. Most customers pay deposit charges on a monthly basis. Merchant and Bankcard Fees — The Company earns various types of network transaction fees from third party payment network providers which consist of (i) interchange fees earned from the payment network as a debit card issuer and (ii) ongoing merchant fees earned by the Company for referring our clients to the payment processing provider which allows our clients to accept credit cards as a form of payment. The Company is an issuer of debit cards only as it relates to Merchant and Bankcard fees. Interchange income, which is settled on a daily basis, is recognized as settlement occurs. Chargebacks have not historically been, nor are they expected to be significant to the overall fee revenue and will be recognized upon occurrence. Referral and merchant fees are recognized when the transaction occurs.

2. STOCK-BASED COMPENSATION (Ta

2. STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2018
STOCK BASED COMPENSATION. (Tables)
Schedule of Share-based Compensation, Stock Options, Activity	Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding at January 1, 2018 97,543 $ 11.26 3.1 years $ 419 Awarded — — — — Exercised (13,359 ) 9.23 — — Expired, forfeited or cancelled (35,135 ) 15.67 — — Outstanding at June 30, 2018 49,049 $ 8.65 3.9 years $ 353 Vested at June 30, 2018 41,913 $ 8.54 3.5 years $ 306 Non-vested at June 30, 2018 7,136 $ 9.29 6.5 years $ 47
Schedule of Nonvested Share Activity	Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2018 49,053 $ 12.27 Awarded 22,514 15.44 Less: Vested (25,455 ) 10.84 Less: Expired, forfeited or cancelled (4,655 ) 13.69 Nonvested at June 30, 2018 41,457 $ 10.61

5. INVESTMENT SECURITIES (Table

5. INVESTMENT SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2018
INVESTMENTS SECURITIES (Tables)
Available-for-sale Securities	June 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 260,715 $ 634 $ (4,890 ) $ 256,459 Obligations of states and political subdivisions 15,851 153 (294 ) 15,710 Corporate bonds 6,492 84 (70 ) 6,506 U.S. Treasury securities 2,989 — (4 ) 2,985 $ 286,047 $ 871 $ (5,258 ) $ 281,660 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 233,956 $ 1,184 $ (2,271 ) $ 232,869 Obligations of states and political subdivisions 22,281 528 (94 ) 22,715 Corporate bonds 6,490 160 (24 ) 6,626 Equity securities: Corporate stock 51 61 — 112 $ 262,778 $ 1,933 $ (2,389 ) $ 262,322
Held-to-maturity Securities	June 30, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 330 $ 19 $ — $ 349 December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Entities $ 378 $ 26 $ — $ 404
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	June 30, 2018 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Entities $ 146,460 $ (2,727 ) 59,701 (2,163 ) $ 206,161 $ (4,890 ) Obligations of states and political subdivisions 1,686 (89 ) 4,483 (205 ) 6,169 (294 ) Corporate bonds 2,422 (70 ) — — 2,422 (70 ) U.S. Treasury securities 2,985 (4 ) — — 2,985 (4 ) $ 153,553 $ (2,890 ) $ 64,184 $ (2,368 ) $ 217,737 $ (5,258 ) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: US Government Agencies and Sponsored Entities $ 119,455 $ (1,148 ) $ 49,258 $ (1,123 ) $ 168,713 $ (2,271 ) Obligations of states and political subdivisions 1,130 (9 ) 4,654 (85 ) 5,784 (94 ) Corporate bonds 1,967 (24 ) — — 1,967 (24 ) $ 122,552 $ (1,181 ) $ 53,912 $ (1,208 ) $ 176,464 $ (2,389 )
Available-for-sale Securities, Debt Maturities, Basis of Allocation	Available-for-Sale Held-to-Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ 2,989 $ 2,985 After one year through five years 4,629 4,570 After five years through ten years 12,306 12,310 After ten years 5,408 5,336 25,332 25,201 Investment securities not due at a single maturity date: US Government Agencies and Sponsored Entities 260,715 256,459 $ 330 $ 349 $ 286,047 $ 281,660 $ 330 $ 349

6. IMPAIRED AND NONPERFORMING23

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED (Tables)	6 Months Ended
	Jun. 30, 2018
Impaired And Nonperforming Loans And Leases And Other Real Estate Owned Tables
Schedule of Nonperforming loans and leases and other assets and OREO	(dollars in thousands) June 30, 2018 December 31, 2017 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 13 $ 1,603 Nonaccrual loans and leases that are past due 1,931 289 Loans and leases past due 90 days and accruing interest — — Other real estate owned 961 961 Total nonperforming assets $ 2,905 $ 2,853 Nonperforming loans and leases to total loans and leases 0.66 % 0.60 % Total nonperforming assets to total assets 0.43 % 0.44 %
Schedule of Impaired Financing Receivables	(dollars in thousands) As of June 30, 2018 As of December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ 1,598 $ 2,671 $ — Real estate-commercial 5,990 6,223 — 5,674 5,907 — Real estate-residential 326 413 — 329 416 — Consumer 69 69 — — — — Subtotal $ 6,385 $ 6,705 $ — $ 7,601 $ 8,994 $ — With an allowance recorded: Commercial $ 1,562 $ 2,635 $ 200 $ — $ — $ — Real estate-commercial 2,771 2,854 171 4,396 4,483 261 Real estate-multi-family — — — 474 474 21 Real estate-residential 1,263 1,263 75 1,286 1,286 73 Subtotal $ 5,596 $ 6,752 $ 446 $ 6,156 $ 6,243 $ 355 Total: Commercial $ 1,562 $ 2,635 $ 200 $ 1,598 $ 2,671 $ — Real estate-commercial 8,761 9,077 171 10,070 10,390 261 Real estate-multi-family — — — 474 474 21 Real estate-residential 1,589 1,676 75 1,615 1,702 73 Consumer 69 69 — — — — $ 11,981 $ 13,457 $ 446 $ 13,757 $ 15,237 $ 355
Schedule of Average Balance Recorded to Imapired Loans and Leases	Average Recorded Investments for the three months ended Average Recorded Investments for the six months ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Commercial $ 1,562 $ 16 $ 1,580 $ — Real estate-commercial 8,794 14,067 8,828 13,732 Real estate-multi-family — 481 — 478 Real estate-residential 1,596 2,296 1,602 2,437 Agriculture — 357 — 351 Consumer 69 — 69 — Total $ 12,021 $ 17,217 $ 12,079 $ 16,998
Schedule of interest income recognized on impaired loans and leases	Interest Income Recognized for the three months ended Interest Income Recognized for the six months ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Commercial $ — $ — $ — $ 1 Real estate-commercial 129 179 238 356 Real estate-multi-family — 8 — 16 Real estate-residential 21 37 41 63 Agriculture — 4 — 9 Consumer — — 2 — Total $ 150 $ 228 $ 281 $ 445

8. ALLOWANCE FOR LOAN AND LEA24

8. ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)	6 Months Ended
	Jun. 30, 2018
Loans And Leases And Allowance For Loan And Lease Losses Tables
Schedule Of Recorded Investment Evaluated Based On Internal Risk Ratings	June 30, 2018 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 23,308 $ 160,143 $ 62,197 $ 6,408 $ 14,976 Watch 125 15,854 3,871 — 1,848 Special mention — 1,265 — — — Substandard 31 282 — — — Doubtful or loss 1,562 — — — — Total $ 25,026 $ 177,544 $ 66,068 $ 6,408 $ 16,824 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 117 $ 2,603 $ 529 $ 270,281 Watch — — 150 21,848 Special mention — — 1 1,266 Substandard — — 69 382 Doubtful or loss — — — 1,562 Total $ 117 $ 2,603 $ 749 $ 295,339 December 31, 2017 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 23,617 $ 164,815 $ 73,644 $ 5,863 $ 13,767 Watch 96 18,083 4,381 — 1,507 Special mention 66 2,265 — — 539 Substandard — 289 — — — Doubtful or loss 1,598 — — — — Total $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 205 $ 1,713 $ 713 $ 284,337 Watch — — 155 24,222 Special mention — — 70 2,940 Substandard — — 7 296 Doubtful or loss — — — 1,598 Total $ 205 $ 1,713 $ 945 $ 313,393
Summary Of Analysis Of Allowance For Loan Losses	June 30, 2018 (dollars in thousands) Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2018 $ 447 $ 2,174 $ 1,047 $ 269 $ 205 $ — $ 31 $ 14 $ 291 $ 4,478 Provision for loan losses 213 (78 ) (208 ) 29 34 (1 ) 18 (3 ) (4 ) — Loans charged-off — — — — — — — — — — Recoveries 9 4 — — — 1 — — — 14 Ending balance, June 30, 2018 $ 669 $ 2,100 $ 839 $ 298 $ 239 $ — $ 49 $ 11 $ 287 $ 4,492 Ending balance: Individually evaluated for impairment $ 200 $ 171 $ — $ — $ 75 $ — $ — $ — $ — $ 446 Ending balance: Collectively evaluated for impairment $ 469 $ 1,929 $ 839 $ 298 $ 164 $ — $ 49 $ 11 $ 287 $ 4,046 Loans Ending balance $ 25,026 $ 177,544 $ 66,068 $ 6,408 $ 16,824 $ 117 $ 2,603 $ 749 $ — $ 295,339 Ending balance: Individually evaluated for impairment $ 1,562 $ 8,761 $ — $ — $ 1,589 $ — $ — $ 69 $ — $ 11,981 Ending balance: Collectively evaluated for impairment $ 23,464 $ 168,783 $ 66,068 $ 6,408 $ 15,235 $ 117 $ 2,603 $ 680 $ — $ 283,358 Allowance for Loan and Lease Losses Beginning balance, March 31, 2018 $ 546 $ 2,143 $ 966 $ 288 $ 218 $ — $ 31 $ 15 $ 281 $ 4,488 Provision for loan losses 121 (45 ) (127 ) 10 21 — 18 (4 ) 6 — Loans charged off — — — — — — — — — — Recoveries 2 2 — — — — — — — 4 Ending balance, June 30, 2018 $ 669 $ 2,100 $ 839 $ 298 $ 239 $ — $ 49 $ 11 $ 287 $ 4,492 December 31, 2017 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ — $ 261 $ 21 $ — $ 73 $ — $ — $ — $ — $ 355 Ending balance: Collectively evaluated for impairment $ 447 $ 1,913 $ 1,026 $ 269 $ 132 $ — $ 31 $ 14 $ 291 $ 4,123 Loans Ending balance $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ — $ 313,393 Ending balance: Individually evaluated for impairment $ 1,598 $ 10,070 $ 474 $ — $ 1,615 $ — $ — $ — $ — $ 13,757 Ending balance: Collectively evaluated for impairment $ 23,779 $ 175,382 $ 77,551 $ 5,863 $ 14,198 $ 205 $ 1,713 $ 945 $ — $ 299,636 June 30, 2017 (dollars in thousands) Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2017 $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Provision for loan losses 58 (12 ) (62 ) 11 15 — (5 ) (8 ) 3 — Loans charged-off — — — — — — — — — — Recoveries 3 53 — — — — — 3 — 59 Ending balance, June 30, 2017 $ 916 $ 2,091 $ 789 $ 457 $ 268 $ 1 $ 59 $ 19 $ 281 $ 4,881 Allowance for Loan and Lease Losses Beginning balance, March 31, 2017 $ 836 $ 2,107 $ 836 $ 479 $ 232 $ 1 $ 62 $ 21 $ 259 $ 4,833 Provision for loan losses 78 (60 ) (47 ) (22 ) 36 — (3 ) (4 ) 22 — Loans charged off — — — — — — — — — — Recoveries 2 44 — — — — — 2 — 48 Ending balance, June 30, 2017 $ 916 $ 2,091 $ 789 $ 457 $ 268 $ 1 $ 59 $ 19 $ 281 $ 4,881
Summary Of Activity in Allowance For Loan Losses By Loan Class	June 30, 2018 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ 18 $ 1,562 $ 1,580 $ 23,446 $ 25,026 — $ 1,593 Real estate: Commercial — — 283 283 177,261 177,544 — 283 Multi-family — — — — 66,068 66,068 — — Construction — — — — 6,408 6,408 — — Residential 99 — — 99 16,725 16,824 — — Other: Leases — — — — 117 117 — — Agriculture — — — — 2,603 2,603 — — Consumer — — 69 69 680 749 — 68 Total $ 99 $ 18 $ 1,914 $ 2,031 $ 293,308 $ 295,339 $ — $ 1,944 December 31, 2017 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 25,377 $ 25,377 $ — $ 1,597 Real estate: Commercial — — 289 289 185,163 185,452 — 289 Multi-family — — — — 78,025 78,025 — — Construction — — — — 5,863 5,863 — — Residential 146 — — 146 15,667 15,813 — — Other: Leases — — — — 205 205 — — Agriculture — — — — 1,713 1,713 — — Consumer 1 — — 1 944 945 — 6 Total $ 147 $ — $ 289 $ 436 $ 312,957 $ 313,393 $ — $ 1,892

11. FAIR VALUE MEASUREMENTS (Ta

11. FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2018
Assets and liabilities measured at fair value on a recurring and non-recurring basis are presented in the following table
Schedule of Assets and Associated Liabilities Accounted for as Secured Borrowings	Carrying Fair Value Measurements Using: June 30, 2018 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 45,068 $ 45,068 $ — $ — $ 45,068 Federal funds sold 8,000 8,000 — — 8,000 Interest-bearing deposits in banks 1,746 — 1,746 — 1,746 Available-for-sale securities 281,660 2,985 278,675 — 281,660 Held-to-maturity securities 330 — 349 — 349 FHLB stock 3,932 N/A N/A N/A N/A Net loans and leases: 290,552 — — 298,480 298,480 Accrued interest receivable 1,873 — 1,067 806 1,873 Financial liabilities: Deposits: Noninterest-bearing $ 221,402 $ 221,402 $ — $ — $ 221,402 Savings 70,184 70,184 — — 70,184 Money market 145,801 145,901 — — 145,901 Interest checking 66,729 66,729 — — 66,729 Time Deposits 77,200 — 77,038 — 77,038 Short-term borrowings 6,500 6,500 — — 6,500 Long-term borrowings 9,000 — 8,980 — 8,980 Accrued interest payable 65 7 58 — 65 Carrying Fair Value Measurements Using: December 31, 2017 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 38,467 $ 38,467 $ — $ — $ 38,467 Interest-bearing deposits in banks 1,746 — 1,750 — 1,750 Available-for-sale securities 262,322 66 262,256 — 262,322 Held-to-maturity securities 378 — 404 — 404 FHLB stock 3,932 N/A N/A N/A N/A Net loans and leases: 308,713 — — 317,900 317,900 Accrued interest receivable 1,956 — 1,124 832 1,956 Financial liabilities: Deposits: Noninterest-bearing $ 215,528 $ 215,528 $ — $ — $ 215,528 Savings 66,130 66,130 — — 66,130 Money market 130,032 130,032 — — 130,032 Interest checking 64,709 64,709 — — 64,709 Time Deposits 79,681 — 79,614 — 79,614 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12.000 — 11,978 — 11,978 Accrued interest payable 65 4 61 — 65
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques	Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) June 30, 2018 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Entities $ 256,459 $ — $ 256,459 $ — $ — Obligations of states and political subdivisions 15,710 — 15,710 — — Corporate bonds 6,506 — 6,506 — — U.S. Treasury bonds 2,985 2,985 — — — Total recurring $ 281,660 $ 2,985 $ 278,675 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 1,362 $ — $ — $ 1,362 $ — Total nonrecurring $ 1,362 $ — $ — $ 1,362 $ — Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) December 31, 2017 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 232,869 $ — $ 232,869 $ — $ — Corporate Debt securities 6,626 — 6,626 Obligations of states and political subdivisions 22,715 — 22,715 — — Corporate stock 112 66 46 — — Total recurring $ 262,322 $ 66 $ 262,256 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 1,598 $ — $ — $ 1,598 $ (1,073 ) Real estate: Commercial 178 — — 178 — Residential 329 — — 329 — Other real estate owned Land 961 — — 961 — Total nonrecurring $ 3,066 $ — $ — $ 3,066 $ (1,073 )

2. STOCK-BASED COMPENSATION (De

2. STOCK-BASED COMPENSATION (Details) - Options Shares $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares
Outstanding | shares	97,543
Awarded | shares	0
Exercised | shares	(13,359)
Expired, forfeited or cancelled | shares	(35,135)
Outstanding | shares	31,008
Number of options vested | shares	41,913
Nonvested, Shares | shares	7,136
Weighted average exercise price, outstanding beginning | $ / shares	$ 11.26
Awarded | $ / shares	0
Exercised | $ / shares	9.23
Expired, forfeited or cancelled | $ / shares	15.67
Weighted average exercise price, outstanding ending | $ / shares	8.65
Weighted average exercise price of vested stock options (in dollars per share) | $ / shares	8.54
Weighted average exercise price of nonvested stock options (in dollars per share) | $ / shares	$ 9.29
Weighted years to maturity outstanding beginning	3 years 1 month 6 days
Weighted years to maturity outstanding Ending	3 years 10 months 24 days
Weighted average remaining contractual term in years, vested	3 years 6 months
Weighted average remaining contractual term in years, non-vested	6 years 6 months
Aggregate Intrinsic Value, options outstanding, beginning | $	$ 419
Aggregate Intrinsic Value, options outstanding, ending | $	353
Aggregate Intrinsic Value, options vested | $	306
Aggregate Intrinsic Value, options non-vested | $	$ 47

2. STOCK-BASED COMPENSATION (27

2. STOCK-BASED COMPENSATION (Details 1) - Restricted stock	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Restricted Stock Nonvested beginning balance | shares	49,053
Awarded | shares	22,514
Less: Vested | shares	(25,455)
Less: Expired, forfeited or cancelled | shares	(4,655)
Restricted Stock Nonvested ending balance | shares	41,457
Weighted Average Grant Date Fair Value Nonvested beginning balance | $ / shares	$ 12.27
Awarded | $ / shares	15.44
Less: Vested | $ / shares	10.84
Less: Expired, forfeited or cancelled | $ / shares	13.69
Weighted Average Grant Date Fair Value Nonvested ending balance | $ / shares	$ 10.61

2. STOCK-BASED COMPENSATION (28

2. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Authorized shares that remain available for issuance under the 2010 Plan	1,290,590		1,290,590
Share based compensation	$ 19	$ 36	$ 151	$ 201
Tax benefit of equity compensation expense			$ 37	$ 73
Intrinsic value used for stock options and restricted stock	$ 15.85		$ 15.85
Restricted stock
Stock options outstanding under Equity Incentive Plan	41,457		41,457
Compensation cost related to nonvested stock option awards not yet recorded	$ 458		$ 458
Period for recognition			3 years 10 months 24 days
Weighted average costs is expected period			1 year 2 months 12 days
Options Shares
Stock options outstanding under Equity Incentive Plan	31,008		31,008		97,543
Compensation cost related to nonvested stock option awards not yet recorded	$ 36		$ 36
Period for recognition			2 years
Weighted average costs is expected period			1 year 2 months 12 days
2010 Plan
Stock options outstanding under Equity Incentive Plan	18,041		18,041

3. COMMITMENTS AND CONTINGENC29

3. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Commitments
Loan commitments
Commitments	21,966	10,923
Standby letters of credit
Commitments	$ 121	$ 121

4. EARNINGS PER SHARE COMPUTA30

4. EARNINGS PER SHARE COMPUTATION (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share Computation Details Narrative
Weighted average common shares outstanding	5,843,340	6,346,650	5,919,321	6,454,864
Dilutive effect of stock based awards	39,574	81,372	38,082	85,801
Antidilutive stock option excluded from earnings per share	0	32,448	0	32,448

5. INVESTMENT SECURITIES (Detai

5. INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Available for sale securities, Amortized Cost	$ 286,047	$ 262,778
Available for sale securities, Unrealized Gains	871	1,933
Available for sale securities, Unrealized Losses	5,258	(2,389)
Available for sale securities, Estimated Fair Value	281,660	262,322
Held-to-Maturity Debt securities Amortized Cost	349
Held-to-Maturity Debt securities Estimated Fair Value	349	404
US Government Agencies and Sponsored Agencies
Available for sale securities, Amortized Cost	260,715	233,956
Available for sale securities, Unrealized Gains	634	1,184
Available for sale securities, Unrealized Losses	4,890	(2,271)
Available for sale securities, Estimated Fair Value	256,459	232,869
Held-to-Maturity Debt securities Amortized Cost	330	378
Held-to-Maturity Debt securities Gross Unrealized Gains	19	26
Held-to-Maturity Debt securities Gross Unrealized Losses	0	0
Held-to-Maturity Debt securities Estimated Fair Value	330	404
Obligations of states and political subdivisions
Available for sale securities, Amortized Cost	15,851	22,281
Available for sale securities, Unrealized Gains	153	528
Available for sale securities, Unrealized Losses	(294)	(94)
Available for sale securities, Estimated Fair Value	15,710	22,715
Corporate Bonds
Available for sale securities, Amortized Cost	6,492	6,490
Available for sale securities, Unrealized Gains	84	160
Available for sale securities, Unrealized Losses	(70)	(24)
Available for sale securities, Estimated Fair Value	6,506	6,626
US Treasury securities
Available for sale securities, Amortized Cost	2,989
Available for sale securities, Unrealized Gains	0
Available for sale securities, Unrealized Losses	(4)
Available for sale securities, Estimated Fair Value	$ 2,985
Equity Securities - Corporate Stock
Available for sale securities, Amortized Cost		51
Available for sale securities, Unrealized Gains		61
Available for sale securities, Unrealized Losses		0
Available for sale securities, Estimated Fair Value		$ 112

5. INVESTMENT SECURITIES (Det32

5. INVESTMENT SECURITIES (Details 1) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Less than 12 months, Estimated Fair Value	$ 153,553	$ 122,552
Less than 12 months, Unrealized Loss	(2,890)	(1,181)
12 months or more, Estimated Fair Value	64,184	53,912
12 months or more, Unrealized Loss	(2,368)	(1,208)
Total Estimated Fair Value	217,737	176,464
Total Unrealized Loss	(5,258)	(2,389)
US Government Agencies and Sponsored Agencies
Less than 12 months, Estimated Fair Value	146,460	119,455
Less than 12 months, Unrealized Loss	(2,727)	(1,148)
12 months or more, Estimated Fair Value	59,701	49,258
12 months or more, Unrealized Loss	(2,163)	(1,123)
Total Estimated Fair Value	206,161	168,713
Total Unrealized Loss	(4,890)	(2,271)
Obligations of states and political subdivisions
Less than 12 months, Estimated Fair Value	1,686	1,130
Less than 12 months, Unrealized Loss	(89)	(9)
12 months or more, Estimated Fair Value	4,483	4,654
12 months or more, Unrealized Loss	(205)	(85)
Total Estimated Fair Value	6,169	5,784
Total Unrealized Loss	(294)	(94)
Corporate Bonds
Less than 12 months, Estimated Fair Value	2,422	1,967
Less than 12 months, Unrealized Loss	(70)	(24)
12 months or more, Estimated Fair Value	0	0
12 months or more, Unrealized Loss	0	0
Total Estimated Fair Value	2,422	1,967
Total Unrealized Loss	(70)	$ (24)
US Treasury securities
Less than 12 months, Estimated Fair Value	2,985
Less than 12 months, Unrealized Loss	(4)
12 months or more, Estimated Fair Value	0
12 months or more, Unrealized Loss	0
Total Estimated Fair Value	2,985
Total Unrealized Loss	$ (4)

5. INVESTMENT SECURITIES (Det33

5. INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Equity securities, Amortized Cost	$ 256,459
Equity securities, Estimated Fair Value	281,660
Held-to-Maturity Amortized Cost	349
Held-to-Maturity Estimated Fair Value	349	$ 404
Equity Securities - Corporate Stock
Within one year, Amortized Cost	2,989
After one through five years, Amortized Cost	4,629
After five through ten years, Amortized Cost	12,306
After ten years, Amortized Cost	5,408
Total Amortized Cost	25,332
Within one year, Estimated Fair Value	2,985
After one through five years, Estimated Fair Value	4,570
After five through ten years, Estimated Fair Value	12,310
After ten years, Estimated Fair Value	5,336
Total Estimated Fair Value	25,201
Equity securities, Amortized Cost	260,715
Equity securities, Estimated Fair Value	286,047
US Government Agencies and Sponsored Agencies
Held-to-Maturity Amortized Cost	330	378
Held-to-Maturity Estimated Fair Value	$ 330	$ 404

6. IMPAIRED AND NONPERFORMING34

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonaccrual loans (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Total nonperforming assets	$ 2,905	$ 2,853
Nonperforming loans and leases to total loans and leases	0.66%	0.60%
Total nonperforming assets to total assets	0.43%	0.44%
Nonaccrual loans and leases that are current to terms (less than 30 days past due)
Total nonperforming assets	$ 13	$ 1,603
Nonaccrual loans and leases that are past due
Total nonperforming assets	1,931	289
Loans and leases past due 90 days and accruing interest
Total nonperforming assets	0	0
Other real estate owned
Total nonperforming assets	$ 961	$ 961

6. IMPAIRED AND NONPERFORMING35

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonperforming assets (Details 1) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
With no related allowance recorded: Recorded Investment	$ 6,385	$ 7,601
With no related allowance recorded: Unpaid Principal Balance	6,705	8,994
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	5,596	6,156
With an allowance recorded: Unpaid Principal Balance	6,752	6,243
With an allowance recorded: Related Allowance	446	355
Recorded Investment	11,981	13,757
Unpaid Principal Balance	13,457	15,237
Related Allowance	446	355
Commercial
With no related allowance recorded: Recorded Investment	0	1,598
With no related allowance recorded: Unpaid Principal Balance	0	2,671
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	1,562	0
With an allowance recorded: Unpaid Principal Balance	2,635	0
With an allowance recorded: Related Allowance	200	0
Recorded Investment	1,562	1,598
Unpaid Principal Balance	2,635	2,671
Related Allowance	200	0
Real estate-commercial
With no related allowance recorded: Recorded Investment	5,990	5,674
With no related allowance recorded: Unpaid Principal Balance	6,223	5,907
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	2,771	4,396
With an allowance recorded: Unpaid Principal Balance	2,854	4,483
With an allowance recorded: Related Allowance	171	261
Recorded Investment	8,761	10,070
Unpaid Principal Balance	9,077	10,390
Related Allowance	171	261
Real estate-multi-family
With an allowance recorded: Recorded Investment	0	474
With an allowance recorded: Unpaid Principal Balance	0	474
With an allowance recorded: Related Allowance	0	21
Recorded Investment	0	474
Unpaid Principal Balance	0	474
Related Allowance	0	21
Real Estate Residential
With no related allowance recorded: Recorded Investment	326	329
With no related allowance recorded: Unpaid Principal Balance	413	416
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	1,263	1,286
With an allowance recorded: Unpaid Principal Balance	1,263	1,286
With an allowance recorded: Related Allowance	75	73
Recorded Investment	1,589	1,615
Unpaid Principal Balance	1,676	1,702
Related Allowance	75	$ 73
Consumer
With no related allowance recorded: Recorded Investment	69
With no related allowance recorded: Unpaid Principal Balance	69
With no related allowance recorded: Related Allowance	0
Recorded Investment	69
Unpaid Principal Balance	69
Related Allowance	$ 0

6. IMPAIRED AND NONPERFORMING36

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Impaired loans and leases (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Impaired Loans and Leases	$ 12,021	$ 17,217	$ 12,079	$ 16,998
Interest income recognized on impaired loans and leases	150	228	281	445
Commercial
Impaired Loans and Leases	1,562	16	1,580	0
Interest income recognized on impaired loans and leases	0	0	0	1
Real estate-commercial
Impaired Loans and Leases	8,794	14,067	8,828	13,732
Interest income recognized on impaired loans and leases	129	179	238	356
Real estate-multi-family
Impaired Loans and Leases	0	481	0	478
Interest income recognized on impaired loans and leases	0	8	0	16
Real Estate Residential
Impaired Loans and Leases	1,596	2,296	1,602	2,437
Interest income recognized on impaired loans and leases	21	37	41	63
Agriculture
Impaired Loans and Leases	0	357	0	351
Interest income recognized on impaired loans and leases	0	4	0	9
Consumer
Impaired Loans and Leases	69	0	69	0
Interest income recognized on impaired loans and leases	$ 0	$ 0	$ 2	$ 0

8. LOANS AND LEASES AND ALLOWAN

8. LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES - Internal risk ratings (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Total	$ 295,339	$ 313,393
Pass
Total	270,281	284,337
Watch
Total	21,848	24,222
Special mention
Total	1,266	2,940
Substandard
Total	382	296
Doubtful or loss
Total	1,562	1,598
Commercial Loan [Member] | Pass
Total	23,308	23,617
Commercial Loan [Member] | Watch
Total	125	96
Commercial Loan [Member] | Special mention
Total	0	66
Commercial Loan [Member] | Substandard
Total	31	0
Commercial Loan [Member] | Doubtful or loss
Total	1,562	1,598
Commercial
Total	25,026	25,377
Real estate-commercial
Total	177,544	185,452
Real estate-commercial | Pass
Total	160,143	164,815
Real estate-commercial | Watch
Total	15,854	18,083
Real estate-commercial | Special mention
Total	1,265	2,265
Real estate-commercial | Substandard
Total	282	289
Real estate-commercial | Doubtful or loss
Total	0	0
Real estate-multi-family
Total	66,068	78,025
Real estate-multi-family | Pass
Total	62,197	73,644
Real estate-multi-family | Watch
Total	3,871	4,381
Real estate-multi-family | Special mention
Total	0	0
Real estate-multi-family | Substandard
Total	0	0
Real estate-multi-family | Doubtful or loss
Total	0	0
Real Estate Construction | Pass
Total	6,408	5,863
Real Estate Construction | Watch
Total	0	0
Real Estate Construction | Special mention
Total	0	0
Real Estate Construction | Substandard
Total	0	0
Real Estate Construction | Doubtful or loss
Total	0	0
Real estate-construction
Total	6,408	5,863
Residential Real Estate [Member] | Pass
Total	14,976	13,767
Residential Real Estate [Member] | Watch
Total	1,848	1,507
Residential Real Estate [Member] | Special mention
Total	0	539
Residential Real Estate [Member] | Substandard
Total	0	0
Residential Real Estate [Member] | Doubtful or loss
Total	0	0
Real Estate Residential
Total	16,824	15,813
Leases
Total	117	205
Leases | Pass
Total	117	205
Leases | Watch
Total	0	0
Leases | Special mention
Total	0	0
Leases | Substandard
Total	0	0
Leases | Doubtful or loss
Total	0	0
Agriculture
Total	2,603	1,713
Agriculture | Pass
Total	2,603	1,713
Agriculture | Watch
Total	0	0
Agriculture | Special mention
Total	0	0
Agriculture | Substandard
Total	0	0
Agriculture | Doubtful or loss
Total	0	0
Consumer Loan [Member] | Pass
Total	529	713
Consumer Loan [Member] | Watch
Total	150	155
Consumer Loan [Member] | Special mention
Total	1	70
Consumer Loan [Member] | Substandard
Total	69	7
Consumer Loan [Member] | Doubtful or loss
Total	0	0
Consumer
Total	$ 749	$ 945

8. LOANS AND LEASES AND ALLOW38

8. LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES - Allowance Roll-forward (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Allowance for Loan and Lease Losses Beginning balance	$ 4,488	$ 4,833	$ 4,478	$ 4,822
Provision for loan losses	0	0	0	0
Loans charged off	0	0	0	0
Recoveries	4	48	14	59
Allowance for Loan and Lease Losses Ending balance	4,492	4,881	4,492	4,881
Allowance related to: Loans individually evaluated for impairment	446		446		$ 355
Allowance related to: Loans collectively evaluated for impairment	4,046		4,046		4,123
Loans	295,339		295,339		313,393
Loans individually evaluated for impairment	11,981		11,981		13,757
Loans collectively evaluated for impairment	283,358		283,358		299,636
Commercial
Allowance for Loan and Lease Losses Beginning balance	546	836	447	855
Provision for loan losses	121	78	213	58
Loans charged off	0	0	0	0
Recoveries	2	2	9	3
Allowance for Loan and Lease Losses Ending balance	669	916	669	916
Allowance related to: Loans individually evaluated for impairment	200		200		0
Allowance related to: Loans collectively evaluated for impairment	469		469		447
Loans	25,026		25,026		25,377
Loans individually evaluated for impairment	1,562		1,562		1,598
Loans collectively evaluated for impairment	23,464		23,464		23,779
Real estate-commercial
Allowance for Loan and Lease Losses Beginning balance	2,143	2,107	2,174	2,050
Provision for loan losses	(45)	(60)	(78)	(12)
Loans charged off	0	0	0	0
Recoveries	2	44	4	53
Allowance for Loan and Lease Losses Ending balance	2,100	2,091	2,100	2,091
Allowance related to: Loans individually evaluated for impairment	171		171		261
Allowance related to: Loans collectively evaluated for impairment	1,929		1,929		1,913
Loans	177,544		177,544		185,452
Loans individually evaluated for impairment	8,761		8,761		10,070
Loans collectively evaluated for impairment	168,783		168,783		175,382
Real estate-multi-family
Allowance for Loan and Lease Losses Beginning balance	966	836	1,047	851
Provision for loan losses	(127)	(47)	(208)	(62)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	839	789	839	789
Allowance related to: Loans individually evaluated for impairment	0		0		21
Allowance related to: Loans collectively evaluated for impairment	839		839		1,026
Loans	66,068		66,068		78,025
Loans individually evaluated for impairment	0		0		474
Loans collectively evaluated for impairment	66,068		66,068		77,551
Real estate-construction
Allowance for Loan and Lease Losses Beginning balance	288	479	269	446
Provision for loan losses	10	(22)	29	11
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	298	457	298	457
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	298		298		269
Loans	6,408		6,408		5,863
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	6,408		6,408		5,863
Real Estate Residential
Allowance for Loan and Lease Losses Beginning balance	218	232	205	253
Provision for loan losses	21	36	34	15
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	239	268	239	268
Allowance related to: Loans individually evaluated for impairment	75		75		73
Allowance related to: Loans collectively evaluated for impairment	164		164		132
Loans	16,824		16,824		15,813
Loans individually evaluated for impairment	1,589		1,589		1,615
Loans collectively evaluated for impairment	15,235		15,235		14,198
Leases
Allowance for Loan and Lease Losses Beginning balance	0	1	0	1
Provision for loan losses	0	0	(1)	0
Loans charged off	0	0	0	0
Recoveries	0	0	1	0
Allowance for Loan and Lease Losses Ending balance	0	1	0	1
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	0		0		0
Loans	117		117		205
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	117		117		205
Agriculture
Allowance for Loan and Lease Losses Beginning balance	31	62	31	64
Provision for loan losses	18	(3)	18	(5)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	49	59	49	59
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	49		49		31
Loans	2,603		2,603		1,713
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	2,603		2,603		1,713
Consumer
Allowance for Loan and Lease Losses Beginning balance	15	21	14	24
Provision for loan losses	(4)	(4)	(3)	(8)
Loans charged off	0	0	0	0
Recoveries	0	2	0	3
Allowance for Loan and Lease Losses Ending balance	11	19	11	19
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	11		11		14
Loans	749		749		945
Loans individually evaluated for impairment	69		69		0
Loans collectively evaluated for impairment	680		680		945
Unallocated
Allowance for Loan and Lease Losses Beginning balance	281	259	291	278
Provision for loan losses	6	22	(4)	3
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	287	$ 281	287	$ 281
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	287		287		291
Loans	0		0		0
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	$ 0		$ 0		$ 0

8. LOANS AND LEASES AND ALLOW39

8. LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES - Aging analysis (Details 2) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Total Past Due	$ 2,031	$ 436
Current	293,308	312,957
Total Loans	295,339	313,393
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	1,944	1,892
30 -59 Days Past Due
Total Past Due	99	147
60 -89 Days Past Due
Total Past Due	18	0
Past Due Greater Than 90 Days
Total Past Due	1,914	289
Commercial
Total Past Due	1,580	0
Current	23,446	25,377
Total Loans	25,026	25,377
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	1,593	1,597
Commercial | 30 -59 Days Past Due
Total Past Due	0	0
Commercial | 60 -89 Days Past Due
Total Past Due	18	0
Commercial | Past Due Greater Than 90 Days
Total Past Due	1,562	0
Real estate-commercial
Total Past Due	283	289
Current	177,261	185,163
Total Loans	177,544	185,452
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	283	289
Real estate-commercial | 30 -59 Days Past Due
Total Past Due	0	0
Real estate-commercial | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-commercial | Past Due Greater Than 90 Days
Total Past Due	283	289
Real estate-multi-family
Total Past Due	0	0
Current	66,068	78,025
Total Loans	66,068	78,025
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Real estate-multi-family | 30 -59 Days Past Due
Total Past Due	0	0
Real estate-multi-family | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-multi-family | Past Due Greater Than 90 Days
Total Past Due	0	0
Real estate-construction
Total Past Due	0	0
Current	6,408	5,863
Total Loans	6,408	5,863
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Real estate-construction | 30 -59 Days Past Due
Total Past Due	0	0
Real estate-construction | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-construction | Past Due Greater Than 90 Days
Total Past Due	0	0
Real Estate Residential
Total Past Due	99	146
Current	16,725	15,667
Total Loans	16,824	15,813
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Real Estate Residential | 30 -59 Days Past Due
Total Past Due	99	146
Real Estate Residential | 60 -89 Days Past Due
Total Past Due	0	0
Real Estate Residential | Past Due Greater Than 90 Days
Total Past Due	0	0
Leases
Total Past Due	0	0
Current	0	205
Total Loans	117	205
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Leases | 30 -59 Days Past Due
Total Past Due	0	0
Leases | 60 -89 Days Past Due
Total Past Due	0	0
Leases | Past Due Greater Than 90 Days
Total Past Due	0	0
Agriculture
Total Past Due	0	0
Current	2,603	1,713
Total Loans	2,603	1,713
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Agriculture | 30 -59 Days Past Due
Total Past Due	0	0
Agriculture | 60 -89 Days Past Due
Total Past Due	0	0
Agriculture | Past Due Greater Than 90 Days
Total Past Due	0	0
Consumer
Total Past Due	69	1
Current	680	944
Total Loans	749	945
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	68	6
Consumer | 30 -59 Days Past Due
Total Past Due	0	1
Consumer | 60 -89 Days Past Due
Total Past Due	0	0
Consumer | Past Due Greater Than 90 Days
Total Past Due	69	0
Unallocated
Total Loans	$ 0	$ 0

9. BORROWING ARRANGEMENTS (Deta

9. BORROWING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Borrowing Arrangements
Unsecured short-term borrowing arrangements with two of its correspondent banks	$ 17,000	$ 0
FHLB advances	$ 0	$ 0
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Minimum	1.18%	1.18%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Maximum	1.90%	1.90%
Remaining amounts available under the borrowing arrangement with the FHLB	$ 108,277	$ 117,546
Secured borrowing agreement with the Federal Reserve Bank of San Francisco	$ 7,920	$ 9,085

11. FAIR VALUE MEASUREMENTS - C

11. FAIR VALUE MEASUREMENTS - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financial assets:
Cash and due from banks	$ (45,068)	$ (38,467)
Federal funds sold	(8,000)	0
Interest-bearing deposits in banks	1,746	1,746
Available-for-sale securities	281,660	262,322
Held-to-maturity securities	349	404
FHLB stock	3,932	3,932
Net loans and leases:	298,480	317,900
Accrued interest receivable	1,873	1,956
Deposits:
Noninterest-bearing	221,402	215,528
Savings	70,184	66,130
Money market	145,901	130,032
Interest checking	66,729	64,709
Time Deposits	77,038	79,614
Short-term borrowings	6,500	3,500
Long-term borrowings	8,980	11,978
Accrued interest payable	65	65
Carrying Amount
Financial assets:
Cash and due from banks	45,068	38,467
Federal funds sold	8,000
Interest-bearing deposits in banks	1,746	1,746
Available-for-sale securities	281,660	262,322
Held-to-maturity securities	330	378
FHLB stock	3,932	3,932
Net loans and leases:	290,552	308,713
Accrued interest receivable	1,873	1,956
Deposits:
Noninterest-bearing	221,402	215,528
Savings	70,184	66,130
Money market	145,801	130,032
Interest checking	66,729	64,709
Time Deposits	77,200	79,681
Short-term borrowings	6,500	3,500
Long-term borrowings	9,000	12
Accrued interest payable	65	65
Level 1
Financial assets:
Cash and due from banks	45,068	38,467
Federal funds sold	8,000
Interest-bearing deposits in banks	0	0
Available-for-sale securities	2,985	66
Held-to-maturity securities	0	0
FHLB stock	0	0
Net loans and leases:	0	0
Accrued interest receivable	0	0
Deposits:
Noninterest-bearing	221,402	215,528
Savings	70,184	66,130
Money market	145,901	130,032
Interest checking	66,729	64,709
Time Deposits	0	0
Short-term borrowings	6,500	3,500
Long-term borrowings	0	0
Accrued interest payable	7	4
Level 2
Financial assets:
Cash and due from banks	0	0
Federal funds sold	0
Interest-bearing deposits in banks	1,746	1,750
Available-for-sale securities	278,675	262,256
Held-to-maturity securities	349	404
FHLB stock	0	0
Net loans and leases:	0	0
Accrued interest receivable	1,067	1,124
Deposits:
Noninterest-bearing	0	0
Savings	0	0
Money market	0	0
Interest checking	0	0
Time Deposits	77,038	79,614
Short-term borrowings	0	0
Long-term borrowings	8,980	11,978
Accrued interest payable	58	61
Level 3
Financial assets:
Cash and due from banks	0	0
Federal funds sold	0
Interest-bearing deposits in banks	0	0
Available-for-sale securities	0	0
Held-to-maturity securities	0	0
FHLB stock	0	0
Net loans and leases:	298,480	317,900
Accrued interest receivable	806	832
Deposits:
Noninterest-bearing	0	0
Savings	0	0
Money market	0	0
Interest checking	0	0
Time Deposits	0	0
Short-term borrowings	0	0
Long-term borrowings	0	0
Accrued interest payable	$ 0	$ 0

11. FAIR VALUE MEASUREMENTS - A

11. FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on recurring and non-recurring basis (Details 1) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Recurring
Impaired loans:
Total gain (losses)	$ 0	$ 0
Non Recurring
Impaired loans:
Total gain (losses)	0	(1,073)
US Government Agencies Debt Securities [Member]
Impaired loans:
Total gain (losses)	0	0
US Government Agencies Debt Securities [Member] | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	256,459	232,869
US Government Agencies Debt Securities [Member] | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
US Government Agencies Debt Securities [Member] | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	256,459	232,869
US Government Agencies Debt Securities [Member] | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Obligations of states and political subdivisions
Impaired loans:
Total gain (losses)	0	0
Obligations of states and political subdivisions | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	15,710	22,715
Obligations of states and political subdivisions | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Obligations of states and political subdivisions | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	15,710	22,715
Obligations of states and political subdivisions | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Corporate bonds
Impaired loans:
Total gain (losses)	0
Corporate bonds | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	6,506
Corporate bonds | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0
Corporate bonds | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	6,506
Corporate bonds | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0
US Treasury securities
Impaired loans:
Total gain (losses)	0
US Treasury securities | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	2,985
US Treasury securities | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	2,985
US Treasury securities | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	0
US Treasury securities | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0
Recurring | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	281,660	262,322
Recurring | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	2,985	66
Recurring | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	278,675	262,256
Recurring | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Commercial Loan [Member]
Impaired loans:
Total gain (losses)	0	(1,073)
Commercial Loan [Member] | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	1,362	1,598
Commercial Loan [Member] | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Commercial Loan [Member] | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Commercial Loan [Member] | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	1,362	1,598
Non Recurring | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	1,362	3,066
Non Recurring | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Non Recurring | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Non Recurring | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	$ 1,362	3,066
Corporate Bonds
Impaired loans:
Total gain (losses)		0
Corporate Bonds | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring		6,626
Corporate Bonds | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring		0
Corporate Bonds | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring		6,626
Corporate Bonds | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring		0
Corporate stock
Impaired loans:
Total gain (losses)		0
Corporate stock | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring		112
Corporate stock | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring		66
Corporate stock | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring		46
Corporate stock | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring		0
Residential Real Estate [Member]
Impaired loans:
Total gain (losses)		0
Residential Real Estate [Member] | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		329
Residential Real Estate [Member] | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		0
Residential Real Estate [Member] | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		0
Residential Real Estate [Member] | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		329
Land
Impaired loans:
Total gain (losses)		0
Land | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		961
Land | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		0
Land | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		0
Land | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		961
Real estate-commercial
Impaired loans:
Total gain (losses)		$ 0